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- Title
Assessing Supermarket Product-Line Decisions: The Impact of Slotting Fees.
- Authors
Israilevich, Guillermo
- Abstract
In this paper, I estimate a structural demand model for a product category in a supermarket chain. I use the model to infer manufacturers' side payments to obtain shelf access in the supermarket and I estimate the impact of these fees on product assortment.The results suggest that the supermarket carries some unprofitable products. Instead of eliminating them, it charges slotting fees to the manufacturers of those products.Since the absence of slotting fees would lead the retailer to discontinue some products, this paper argues that forbidding slotting fees would harm consumers. Welfare calculations reveal that product assortment in this market is close to socially optimal.
- Subjects
SLOTTING fees (Retail trade); SUPERMARKETS; PRODUCT management; INDUSTRIALISTS; CONSUMER protection; RETAIL stores
- Publication
Quantitative Marketing & Economics, 2004, Vol 2, Issue 2, p141
- ISSN
1570-7156
- Publication type
Article
- DOI
10.1023/B:QMEC.0000027776.36766.e4